Hampshire County Council v Supportways Community Services Ltd

A dispute arising fundamentally from a contract with a public authority ordinarily attracts private law remedies. Judicial review requires a relevant and sufficient nexus between the disputed contractual conduct and an allegedly unlawful exercise of public law powers. The authority’s public status, the public function served by the contract, or the incorporation of statutory guidance into its terms does not alone supply that nexus.

A claimant cannot obtain public law relief merely because specific performance is unavailable or damages are inadequate. Where a contract provides for one review which triggers expiry, completion of a review recognised as effective exhausts that right. A requirement governing how the review must be conducted does not create a freestanding right to another review after expiry.

A local authority contracted with a service provider for housing-related support services under the Supporting People Scheme. The interim agreement required one review of the services, conducted in accordance with guidance and directions issued under section 93 of the Local Government Act 2000. The review would trigger the agreement’s expiry one year later.

Mitting J held that the authority’s review breached the contractual review requirements but remained effective to trigger expiry. He nevertheless ordered specific performance of a further review. The service provider had sought both contractual and judicial review remedies.

The authority appealed against the order for a further review. The central issues were whether the expired agreement conferred a right to another review and whether public law remedies were available for what was fundamentally a contractual dispute.

1. Appeal allowed. The agreement conferred no contractual right to a further review. The review conducted in 2004 had been treated by the judge as a valid Support Services Review which triggered expiry. The contractual right was to one review of each service and was exhausted when that review occurred. Clause 11.3 regulated the manner in which the review under clause 11.1 was to be performed; it did not create a freestanding right to another review.

2. A requirement to repeat the contractual mechanism which had already brought the agreement to an end could not sensibly survive its expiry. Such an order would also undermine the certainty which justified treating the defective review as effective to trigger termination. The agreement’s provisions requiring the service provider to surrender relevant documents on expiry further contradicted the suggested continuing review obligation.

3. The service provider was therefore confined in private law to damages for breach of the review obligation. The absence of an obligation to award it a new contract might make those damages difficult to assess or nominal, but that did not justify specific performance of a review for which the agreement made no provision.

4. The claim was not amenable to judicial review. A contractual obligation does not become a public law duty merely because it refers to a statutory duty or because the contract concerns public administration. The duty arising under section 93 of the Local Government Act 2000 was owed to the Secretary of State in connection with grants, not to service providers.

5. Per Mummery LJ, with whom Neuberger and Wilson LJJ agreed, public law relief required at least a relevant and sufficient nexus between the disputed contractual conduct and an allegedly unlawful exercise of public law powers. That element was absent. The source and consequences of the review were contractual, and public law terminology could not alter the dispute’s substance.

6. A contracting party cannot resort to public law remedies merely because specific performance is unavailable or damages are inadequate. The service provider’s late application to challenge the finding that the review triggered expiry was refused. The order for a further review was set aside; the court indicated that an inquiry as to damages might be appropriate, subject to further argument.

1. Court of Appeal (Civil Division): By judgment dated 18 July 2006, [2006] EWCA Civ 1035 , unanimously allowed the local authority’s appeal and set aside the order requiring a further review. It refused the service provider’s late application for permission to challenge the finding that the original review had triggered expiry.

2. High Court, Administrative Court: Mitting J held that the original review breached the contractual review requirements but remained effective to trigger expiry. He ordered specific performance requiring the authority to undertake a further review.